Farmers warned over low milk price forecast

Dairy farmers are being warned to prepare for the possibility of a lower milk price forecast for the coming season.

It follows an almost ten percent fall in overnight prices on Fonterra's global online market.

Federated Farmers Dairy Chairman, Willy Leferink, says the price drop is not unexpected as there's an abundance of milk being produced here, and around the world.

He says farmers will have to watch what happens over the next few months, but with Fonterra already having revised down its payout by 45 cents farmers should begin preparing for a potentially lower forecast than $6.30.

Meanwhile across the Tasman, the milk price war continues and the Melbourne Age Newspaper is reporting up to 16 percent of ''permeate'' is being added to fresh milk to keep prices down.

Permeate is described as a watery, greenish waste product from the production of cheese.

Fonterra admits it's adding permeate to New Zealand milk, but won't say what the percentage is.

It says permeate is a lactose-rich stream produced from the ultra-filtration of milk and added to the range of Blue milk to ensure that the milk protein composition is consistent throughout the year.

Fonterra says it's normal practice amongst fresh milk manufacturers.

It says their milk meets the Food Standards Australia New Zealand code.

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